Goldman Sachs
has made its first direct property investment in Australia, snapping up the City of Brisbane Investment Corporation’s 157 Ann Street.

As foreshadowed in The Australian Financial Review last week, Goldman Sachs, through its subsidiary, Austreo Property Ventures, paid $39 million for the building, majority leased by the Brisbane City Council.

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It also scooped up Suncorp Group’s $1.6 billion of non-performing loans in June, beating off underbidders Macquarie and Blackstone.

The exposures included loans to Brisbane developer the Anthony John Group’s Southpoint project in Southbank which has been precommited to by Flight Centre.

Goldman has taken numerous other debt stakes but this new investment at the 13-storey Brisbane office tower with a lease to the BCC until 2019, is its first direct investment and is said to be a play on a long-term turnaround in the Brisbane market.

There are several different views and approaches taken by different divisions within the Goldman Sachs giant towards Australian commercial real estate. Goldman Sachs Asset Management said in August this year that “ill discipline" was creeping back to the management of Australia’s real estate investment trusts and expected lower earnings growth from them.

All of Goldman Sachs Asset Management’s major retail funds were now completely devoid of real estate investment trust exposure, including its Australian Equities Wholesale Fund, Premier Australian Equities Fund and its Emerging Leaders Wholesale Fund.